“Research in behavioral finance is relatively new: it took place mostly since 1985. The workshop in behavioral finance has continued under the direction of Robert J. Shiller and Richard H. Thaler at the NBER since 1991. Over these years, we have seen the blossoming of behavioral finance into a significant body of knowledge.

The research methods in finance most in use before the advent of behavioral finance did not then seem to lend themselves to the application of psychology. Models of individual optimization were almost exclusively based on the assumption of perfectly rational individual behavior. Many of the predictions of these models were described as representing the notion that financial markets were “efficient,” that is, that prices in financial markets accurately incorporate all publicly available information. Studies of the efficiency of financial markets often reported apparent contradictions of efficient markets in the literature, but, before the development of the theory of behavioral finance, their results were hard to interpret, there being at that time no well-delineated alternative hypothesis to compare with the efficient markets hypothesis.”

This is a great resource to have, the major works on this subject are on the website, so we can quickly follow the evolution and arrive at the cutting edge research on the area! A mandatory reference for every graduate student!

“Macroeconomic phenomena are the aggregated result of individual decision making. Behavioral macroeconomics approaches the study of these phenomena from a broad social science perspective, acknowledging the complexity of underlying human behavior and making use of an expansive repertory of research methods.”

Unfortunetly they no longer do this workshop but the papers in there are still references!

Once again dig it up!

This two workshops are great, and it reveal the real qualities of Shiller and Akerlof.